I wrote previously about the extortionate “brokerage” fees charged by UPS and FedEx for imports into Canada. That post has attracted a huge volume of response from other enraged people. I have learned more since then, including an interesting response direct from the Canada Border Services Agency.
If you contact UPS, they’ll tell you that you can indeed clear your package through customs yourself, but you have to do so at the customs office in the same town as the UPS depot where your shipment is being held. For me, receiving shipments into Ontario, it would either be Fort Erie or Windsor. They can’t tell you in advance which it will be. But either way, it’s a long drive.

One option that might be acceptable for some people is to use a shipping depot inside the US. You just have your package shipped to the depot. They’ll hold onto it for you until you come get it. Some of them, remailing services, will actually ship it on to you themselves, but then you may end up getting the same brokerage treatment again.

I was considering trying CBI Usa in Niagara Falls, NY. Their rates seem very reasonable, they’re easy to use, and I’ve seen mostly positive experiences reported on the web. But still, it’s a regrettable amount of driving.

I contacted Canada Border Services Agency by email to get their take on doing your own customs clearance:

I’m trying to find a way to import a package by UPS from the US. I refuse to pay their extortionate brokerage fee. I would sooner burn the money than gave it to those bastards (more colourful terms come to mind, but I’m trying to keep this polite.)

As I understand it, I have no choice but to deal with the Customs office in the town where they hold my package, which is going to be either Fort Erie or Windsor. I don’t know why that is, there’s a customs office at the KW airport 15 minutes drive from me, but there it is. But UPS can’t tell me which in advance which office the package would go through. I’d guess Windsor.

After I found out which of those two offices it was, would it be possible for me to complete the clearance process by phone, fax or Internet? It’s a simple process, right? I just give you the Harmonized Codes, you calculate what I owe, and I pay you, probably by credit card. No part of this strictly requires my physical presence. I can’t see any good reason why, in this day of high-speed Internet in every home, I can’t do this whole process in my pyjamas from the comfort of my bedroom.

If we can’t figure out a reasonable way to do this without uselessly converting another tank of fuel into greenhouse gases, then it just won’t happen. I’m not going to pay off those UPS criminals to do this trivial thing (and probably do it wrong) on my behalf. Or rather, it probably will happen, but it will happen by way of me driving to the US to pick up the package myself from a maildrop service. It’s actually a shorter drive to Niagara Falls, NY than to Fort Erie.

But it would be really damn stupid for me to have to do that. There has to be a better way. Tell me what it is.

When I said UPS would probably do the clearance wrong, I wasn’t kidding. My first ever experience with courier brokerage was some X-10 home-automation gear imported via FedEx. After I learned more about this stuff, I figured out that they had use the wrong Harmonized Codes for some of the gear. Because they basically had no idea what the stuff was, they were just looking for similar-sounding words. Fortunately, the codes they picked had the same (ie, zero) tariff rates, so I didn’t get burned that way.

CBSA’s first response to this email was unhelpful, merely referring me to web-pages about Licensed Customs Brokers, and Importing Non-Commercial Goods By Mail. Both of which I had already read, and which did not address the essential question: can I deal with customs at my local office, or by phone, fax, or email, and if not, why not?

After a long delay, I received a second rather more helpful response:

This is in response to your e-mail concerning the clearance of non-commercial goods imported by courier. It should be noted that your inquiry was originally forwarded to Canada Border Services Agency (CBSA) Client Services in Windsor, Ontario, who attempted to contact you in person to discuss your concerns. Client Services was unable to reach you, thus requiring the preparation of a written reply, and hence the delay in responding.

In some instances, an individual who has imported goods by courier may wish to pay the duties and taxes owing for a shipment released under the Courier Program rather than using the accounting services of the courier or agent. Such shipments do not have to be accounted for at the office of release, but may be accounted for at any CBSA office. In situations such as these, the courier does not automatically release the shipment to the importer, but holds the goods until the importer presents satisfactory proof that the appropriate duties and taxes have been paid directly to the CBSA. In most cases, this would be a copy of the B15, Casual Goods Accounting Document. The importer is responsible for contacting the courier to make the necessary arrangements for this type of transaction.

It should be noted that every person who accounts for casual goods should provide, at the time of accounting and before the goods are released, a commercial invoice, current price list, bill of sale, or other similar document that describes the goods and contains enough information to enable an officer to determine the tariff classification and appraise the value for duty of the goods. In the case of courier shipments, the importer must also provide the unique shipment identifier number assigned by the courier to his or her particular shipment.

Payment of any applicable duties and taxes on casual importations can be made in cash, by money order, traveller’s cheque, bank draft, cheque, Visa, or MasterCard. Payment by debit card is also available at a number of sites.

Although the CBSA allows approved clients to transmit data electronically, this is not the case for casual, non-commercial importers such as you. Accounting for your goods must be done in person, and any monies owing must be paid at the time of accounting.

For additional information and/or clarification on accounting for casual importations, please contact Border Information Service (BIS) by telephone. You can access the BIS line free of charge throughout Canada by calling 1 800-461-9999. If you call during regular business hours (8:00 a.m. to 4:00 p.m. local time, Monday to Friday, except holidays), you can speak to an agent by pressing “0” at any time.

Thank you for contacting the CBSA.

Now that’s more like it! Straight from the horses mouth: UPS is full of shit. You can do your own customs clearance at your local customs office, you don’t have to drive to Windsor or Fort Erie!

Here’s a forum posting where a guy (“Drehkraft”) claims to have done it (“UPS REALLY hates this.”). He even used the same Kitchener airport terminal customs office I would use. I stopped by that customs office and asked them in person if I could do it, and they said it was no problem from their end.

That said, I haven’t yet actually done this myself. It remains to be seen if UPS will throw up arbitrary obstacles (“the B15 document must be faxed to us on yellow paper between 3:00am and 3:01am.”) But there is some homebrewing gear I’ve been planning to buy, hopefully I’ll get around to trying it soon.

331 Responses to “Avoiding UPS/FedEx brokerage fees”

We’re a broker and do our share of casual importations – imports by a person. A few tips for you: Make sure never to cut the value of your goods in half or say it’s a gift or no charge. Customs will not accept a no charge value. You need the actual transactional (sale price) value since Customs can demand even before clearance the Commercial Invoice and PROOF OF PAYMENT. Nothing CBSA likes more than nailing fraudulent importers. With lower revenues coming from the HST, Customs just loves to issue AMPS penalties to Importers — for among other things — the wrong invoice being put in the box by the shipper/exporter. (U.S. Customs and Border Protection fines both American and Canadian companies but CBSA has no power to go after the American companies so they fine the Canadian importers even when the fault lies totally with the American seller.)

Ask for a NAFTA Certificate of Origin when you buy, if possible, to eliminate Duty if your goods are Made in the U.S.A. Mexico or even Canada (something sold in the U.S. but originally manufactured/made in Canada).

And here’s a bigee for you airport passengers with something extra in your carry on. Never lie to Customs and make damned sure the clothing you bought in another country is properly marked with a sticker on each item. Otherwise, it’s AMPS (fine) time again and it will be in the thousands of dollars.

Remember, under the Customs Act, the maximum fine per Customs transaction is $25,000.00. On a small order, you will be fined in the hundreds — on an order worth $1,600+, you will be fined in the thousands.

Good Luck. Remember CBSA has all the cards so declare everything and don’t think you are smarter than they are. After all, they always have an unmarked van at border crossings on the American side filming Canadians as they leave the Duty Free Shop. When they ask you at the border if you have any booze, might be a good idea to honestly declare it.

Canada Government simply do not like people to buy from USA. In the past a few years I learned the lesson.

There is another problem with buying from US sellers. They are very reluctant to use USPS, in fear of that you may claim that you did not receive the package. They usually wont’ budge to lower the amount declared in the customs form.

Since I learned that Canada Government is protecting big retailers in Canada, I now came up with ways to deal with it. My tips:

1. On Ebay, choose Chinese or HK sellers over US ones. They are willing to put a lower value on the customs form. For low valued items they ship through postal office which takes more time. However, the overall amount you pay Canada Government and UPS bastards will be significant.

2. Rent a mail box service at the US side border. Travel a few times a year to bring item to Canada. Considering most items sell 30% at Canadian side, make sure that you buy as much as possible per travel. Spending $3000 you will save at least $1,000 a trip. Declare as less as possible when you pass the border. Border Agents are usually lazy and will wave you through.

3. Set up a business account with Canada Government to claim HST off. Any business will do. Get any cent from the government that rips off you. Your business does not need to make money.

FYI, my “fake” fact comes from CBSA. Secondly, I’m not looking for new business otherwise I would not be posting as A Broker and I would be telling you where we are located.

Now to your tips:

1. I can tell you this story because it concerns a competitor’s client. He ordered his merchandise from Germany. The vendor (company selling the goods) put the wrong Commercial Invoice in the box. His broker put the shipment into Customs. It was inspected and seized by CBSA. An AMPS penalty was issued. Competitor’s client filed an administrative appeal with CBSA which was rejected. Competitor’s client then made an even bigger error and went to Federal Court. (His lawyer was thrilled. $$$) They lost again and got to pay the Canadian government’s costs. In the end, he told me it cost him $40,000.00 Canadian and he got nothing for it.

2. Quite obviously, you aren’t up on CBSA enforcement. In fact, under the Harper government, inspections are more frequent and fines/penalties are bringing in much more money. These people aren’t the bozos you seem to think they are…

3. This is a tricky one. Yes, you can do that but the commercial merchandise imported must be related to the industry your business is OPERATING in. In principle, you can’t clear personal goods using your business number. If they catch you, it will be an AMPS penalty along with a possible visit from CBSA to your commercial premises. Under the law, they can go back 4 years and look at every import the company has made and issue fines accordingly, as appropriate, for other customs infractions.

@Broker Anecdotal evidence is just that anecdotal. Plus you spin it. I’m not surprised that someone gets dinged for falsifying government forms(even unintentionally). You would only get worse lying to the CRA, but you story makes no sense. He should have had requested an adjustment irregardless of the appeal and worst sued the vendor for damages from negligence. The going to federal court makes no sense.

I cleared a package from UPS myself at customs a month ago and just the other day receive a bill for $40 in brokerage fees and taxes. First off I cleared it for free, no taxes and secondly they didn’t broker anything! I called an they found the paperwork and would clear my invoice and a week later they are still calling me to pay! Such nonsense and what a hassle even when I did it myself!

what happens if you refuse delivery and send it back or at least make them deliver the package a bunch of times to make them earn it which is easy because they don’t bother knocking ,they just put a sticker on the door and drive away when i see them or sign it for you and leave it on your side walk .

Are you able to self clear an item to avoid brokerage fees by UPS if the item is over $1600? I am looking at an art piece that is over 1600 and was wondering if i could do what I normally do with CBSA and obtaining a b15?

I can recount to you this story on the grounds that it concerns a contender’s customer. He requested his stock from Germany. The outlet (organization offering the merchandise) put the wrong Commercial Invoice in the case. His agent put the shipment into Customs. It was reviewed and seized by Cbsa. An Amps punishment was issued. Contender’s customer indexed an authoritative offer with Cbsa which was denied. Contender’s customer then made an even greater failure and headed off to Federal Court.They lost again and got to pay the Canadian government’s expenses. Toward the finale, he let me know it take him a lot of money and he got nothing

Good day,
I would be very very, and very appreciative if you could please contact me as son as possible as I would please need your help. I usually order things online and his time around, I am not sure why I fell for dhl, at a delivery cost of about $23, rather than UPS at about $35. I usually use UPS, or FEDEX. But this time around, I thought o use dhl as they were cheaper. *I’ve never use their services from USA to Canada for online purchases. I am asked to pay $220.00 for an online order that does not even amount to $100.00 CAD, after shipping and handling, and the current steep US exchange rate.

I won’t waste your time going into further details on how dhl has been beyond rude, disrespectful, and unprofessional. But I will just give you one scenario; I advised the agent on the other line that her accent did not facilitate my ability to hear her well, most especially when she spoke this fast, without posing. In specific CBS, or dhl terms. She simply became worst, arrogant, intimidating, and used a lot of derogative, and inappropriate language towards me, to say the very least…

I would like to act fast, today, before they aggravate everything else for me. Thanks a tone for your prompt reply. Best regards,
Mrs. Yrazi